South Africa's Sasol cuts dividend as impairment bites (updated)

Sasol

23/08/2023 13:53

* 
      Heavy impairment charge against Secunda petrochemicals
plant 
    

        * 
      Headline earnings up 13%
    

  
 (Rewrites after results presentation, CFO call)
       JOHANNESBURG, Aug 23 (Reuters) - South African
petrochemicals company Sasol  SOLJ.J  cut its dividend by almost
a third on Wednesday after a 35 billion rand ($1.87 billion)
impairment charge against its biggest plant.
    Sasol declared a final dividend of 10 rand per share for the
12 months to June 30, down from 14.7 rand per share a year
earlier, having warned this month that its Secunda operations
near Johannesburg had been hit hard by higher interest rates and
the future production implications of emission-reduction costs.
    The impairment reflects difficulties that threaten the
post-2030 viability of Secunda, which produces fuel from coal
and natural gas. But the company said it is "progressing a
number of initiatives" to restore value in that part of the
group's business, CFO Hanre Rossouw told Reuters.
    Sasol, which has often been criticised by activists and
environmentalists for not doing enough to reduce emissions, has
targeted a 30% reduction in greenhouse gas emissions by 2030 and
net zero by 2050. 
    It had reinstated dividends last year after emerging from
near-bankruptcy in 2020 when the COVID-19 pandemic shook global
markets and sent crude oil and petrochemicals prices tumbling.
    Since then, the company sold a clutch of assets and cut
costs while benefiting from stronger crude oil price.
    The company posted a 13% rise in full-year headline earnings
per share, the main profit measure in South Africa, while
earnings including one-off costs fell by three quarters on
account of the Secunda impairment charge.
($1 = 18.7385 rand)

 (Reporting by Tannur Anders
Editing by Promit Mukherjee and David Goodman)
 ((Tannur.Anders@thomsonreuters.com;))